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Photo by David Hall/Crain's Detroit Busines
"Every week we are adding 500 state-of-the-art LED lights throughout the city," said Odis Jones, CEO of Detroit's Public Lighting Authority.

About 55,000 streetlights will be purchased and installed throughout Detroit after the Michigan Finance Authority sold $185 million in bonds Wednesday on behalf of the Public Lighting Authority.

"Lighting is an essential component to revitalizing Detroit," Gov. Rick Snyder said in a statement. "Not only is it important to public safety, but it is a demonstration of the real improvements happening in the city every day."

In 2012, Snyder signed several laws that created the lighting authority to help the city turn on its streetlights, which for years have been dark in many neighborhoods.

Interim financing of $60 million last December allowed the city to begin installing new lights, and 9,000 have gone up so far.

"Every week we are adding 500 state-of-the-art LED lights throughout the city," Odis Jones, CEO of the Public Lighting Authority, said in a statement. "As a result, the new system will be far more reliable and energy-efficient than what was here before. We are investing in the latest technology to ensure the system is built to last for our citizens."

The 30-year bonds have a fixed interest rate of 4.53 percent and include a refund of the $60 million in interim financing sold last year.

According to the laws setting up the authority, the bonds will be paid back by revenue from a city utility user tax, but the annual aggregate debt limit on any bonds is $12.5 million.

According to the lighting authority, the issuance received an investment-grade rating of A- from Standard and Poor's and BBB+ from Fitch. Citibank was the senior manager on the transaction, with BMO and Loop Capital serving as co-managers. Miller, Canfield, Paddock & Stone PLC was bond counsel for the Public Lighting Authority, while Dickinson Wright PLLC was bond counsel for the Finance Authority. Robert W. Baird & Co. was the municipal adviser.

Thirty-five institutions and several dozen individual retail accounts placed orders for the bonds, according to a statement.

"This project has been a priority for the state, and the MFA was proud to have assisted the PLA to reach its financing goals," Joseph Fielek, executive director of the Finance Authority, said in a statement. "It was important to us to find a long-term solution at a low cost, and we have achieved those objectives.

"It highlights the ability of communities to finance essential projects during financially challenging times if a bond issuance is well-structured."